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Federal Subsidies For Obamacare Ruled Illegal — What Now?

A federal appeals panel handed down a ruling this morning that could be problematic for Obamacare. As just reported, “A judicial panel in a 2-1 ruling said such subsidies can be granted only to those people who bought insurance in an Obamacare exchange run by an individual state or the District of Columbia — not on the federally run exchange HealthCare.gov.” You can read the entire appeal here.

This is the eagerly awaited Halbig case. The crux of the case lies in the wording of the actual bill of Obamacare, which specifically lists state exchanges as a source of subsidies.

There is no mention of federal exchanges in Obamacare. This was created merely by an IRS rule authorizing the subsidies in federal exchanges. If upheld, it could affect millions of Obamacare enrollees. The article notes,

“the ruling could lead many, if not most of those subsidized customers to abandon their health plans sold on HealthCare.gov because they no longer would find them affordable without the often-lucrative tax credits. And if that coverage then is not affordable for them as defined by the Obamacare law, those people will no longer be bound by the law’s mandate to have health insurance by this year or pay a fine next year.

If there were to be a large exodus of subsidized customers from the HealthCare.gov plans, it would in turn likely lead to much higher premium rates for non-subsidized people who would remain in those plans, who are apt as a group to be in worse health than all original enrollees.”

The government will most certainly file a full review in U.S. Court of Appeals for the District of Columbia Circuit.

Regardless of the eventual outcome of the case, here’s the salient point to take away.

When you look at the plain wording of the actual bill, it really doesn’t make any sense (e.g. common sense). Here we have a perfect example of the Democrats trying — and ultimately succeeding — to push something through without looking at it or even carefully thinking through the implications of the words and provisions. That is not a “glitch”. That is disdain.

Obamacare was drafted badly, and they couldn’t even get it corrected the proper way because of the crookedness by which it was passed. Now we have a stupid mistake that the judiciary is being asked to fix. And that’s the problem.

What the government is asking the courts to do is to ignore the literal wording of the law. On the other hand, if the literal wording is indeed upheld, the immediate effect of a reversal is going to be extremely terrible.

Think about it: the IRS will have to go after people for refunds of tax credits. That will be a messy and slow and heated endeavor. Many people, especially poor people, are going to argue that they wouldn’t have used Obamacare insurance if it wasn’t for the subsidies. From a tactical perspective, such a scenario is not necessarily good for conservative or libertarians either, because it sets up the sound-byte narratives that conservatives and libertarians are “taking away your health care”, “they hate the poor, etc”, which will most certainly be used ad nauseam by the Democrats. Is it worth it?

My heart of hearts wants literal side to win, but at the same time, I’m not entirely convinced that its the best thing in the long run. Yet, if the government wins, it reinforces the precedent we’ve been seeing that it is okay to ignore the actual wording of the law passed by Congress. That most certainly is not okay.

This case perfectly highlights the stupidity and utter contempt for which the Democrats have of procedure and law, as seen in the problems with the entire Obamacare bill.

UPDATE: Allahpundit reminds us that the 4th Circuit upheld the Obamacare subsidies for federal exchange consumers.

So…which is it? Is it the intent of the law or the text of the law? Stay tuned on this one.